Post on 19-Jan-2021
transcript
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Synopsis:
Transportation is a significant contributor to economic development but also responsible for
more fuel consumption than any other sector in the Caribbean, making it a leading source of
greenhouse gas (GHG) emissions. On average, the value of fuel imports accounts for roughly 10%
of Gross Domestic Product (GDP) across CARICOM Member States1 and, 39% of total fuel
consumed in CARICOM Member States is attributed to the transportation sector (see Figure 1)i;
making it a prime area of intervention to reduce fuel import dependency, to promote the
diversification of energy supply, to improve the efficiency of transportation, to mitigate GHG
emissions and improve the quality of life of Caribbean people.
1 Without considering Trinidad & Tobago, for which no figures were reported; CARICOM Energy Report Card 2018;
The Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) envisions the
transformation of the energy landscape into a climate resilient, sustainable and affordable
sector; focused on improving the lives of Caribbean people. Sustainable transport is a
major area of focus for the CCREEE, within this vision. The transport sector is a significant
contributor to economic development, and its modern transformation therefore takes
place within a socioeconomic context. A major part of this context is the cross-cutting
interaction with the energy sector. This interaction in modern times has prompted an era
of disruption ignited by emerging transport technologies and evolving stakeholder
requirements. As Caribbean Community (CARICOM) Member States are supported to
enhance their transport solutions, it is paramount that the main disruptors within the
transportation sector are clearly stated and understood. This paper attempts to lay out
the contextual frame of reference for adopting these disruptors, focusing primarily on road
transportation.
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Figure 1: Share of fuel used for the transportation sector in CARICOM Member States (CARICOM ERC 2017)
Most CARICOM Member States recognize the impact of the transportation sector on the
economy and the environment by defining it as a priority sector in their Nationally Determined
Contributions (NDCs) - 11 out of 15 countries - as well as through the national adoption of
sustainable transportation targets; 9 countries have existing targets and 1 country’s is under
development.
As Caribbean countries pursue the transformation of the transportation system toward a
sustainable, efficient and effective sector, the accompanying successful delivery of future
transport services will be driven by three main disruptors:
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Electrification of the transportation system offers numerous benefits from both a macro and
microeconomic perspective and can represent an enormous opportunity for the Caribbean. If the
integration of mobility with the electricity sector and digital technologies is based on a renewable
and efficient energy supply, as well as appropriate storage capacities and flexibility options to
manage the grid, Small Island Developing States (SIDS) can benefit from reduced fuel import
dependence, a diversification of their fuel mix, higher price stability and a healthier society and
environment.
A report by the World Economic Forum predicts a mobility revolution driven by electric vehicles,
where more than half of new cars sold worldwide by 2040 will be Electric Vehicles (EVs). In its
EV30@30 Scenario, the International Energy Agency (IEA) foresees EV sales reaching 44 million
vehicles per year by 2030, with a vehicle stock of more than 250 million vehicles (see Figure 2)2.
This global phenomenon will inevitably impact the transport market in the Caribbean. How the
region responds will be critical to the future of transportation and its supporting infrastructure.
Attention must therefore be paid to all the regional market influences including the region’s
increased access to both electric vehicles from international dealers and previously owned/pre-
owned Internal Combustion Engine (ICE) vehicles resulting from rapid EV uptake in other parts of
the world.
Figure 2: Electric Vehicle Stock 2018-2030 in the EV30@30 scenario (IEA Global EV Outlook 2019)
2 The EV30@30 Scenario accounts for the pledges of the EVI EV30@30 Campaign to reach 30% market share for electric vehicles (EVs) by 2030 (excluding two/three-wheelers); IEA Global EV Outlook 2019;
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Nonetheless, simply replacing ICE vehicles with EVs in the short-term, without adequate planning
and infrastructure and, without a renewable energy source could limit their environmental
benefits and create challenges for the grid. To properly design the transportation system of the
future, (i) a market-specific approach that considers all relevant stakeholders should be applied,
(ii) high-use vehicles in public and commercial fleets should be prioritised as they represent a
higher volume of miles travelled, and (iii) charging infrastructure has to be deployed and
integrated with renewable electricity generation sources and grid edge technology today while
anticipating future mobility and vehicle ownership patterns3.
Policymakers in the Caribbean will have to manage several enablers on both the supply and
demand side to drive this transition and prevent undue market distortions. These comprise a
favourable import regime for electric vehicles, appropriate charging infrastructure, a conducive
market environment and market uptake of EVs. Some specific thematic electrification
interventions are discussed below.
Import Regime Caribbean SIDS, much like other SIDS, have characteristic features and vulnerabilities such as
insularity, geographical remoteness and small economies, populations and land space. These
bring about a heavy import reliance, openness to international trade with varying effects on
economic growth, significant exposure to external shocks and vulnerability to environmental
threats and degradation. Moreover, they create specific logistical challenges in transport and
trade.
Owing to the limited market size of individual SIDS, the import of EVs is often monopolised or
oligopolised with a limited number of dealerships. This can lead to a situation where consumers
make decisions based on limited access to information in the local market. At present, the only
official EV dealership within the CARICOM region is based in Trinidad and Tobago. Other
companies provide EVs to the market in the region but are operating as retailers. Where these
retailers are not official dealerships, the warranty granted by car manufacturers is voided once
the EV leaves the country of manufacture or purchase. The warranty conditions offered for these
vehicles are therefore determined at the discretion of the local or regional retailer. In small
economies like those of Caribbean territories, the electric vehicle market is currently not strong
enough to create better pricing and import conditions and so, the mainstreaming of electric
vehicle imports on a regional level could facilitate the creation of attractive markets with better
conditions for both consumers and car dealers.
3 World Economic Forum, Electric Vehicles for Smarter Cities: The Future of Energy and Mobility, 2018
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Charging Infrastructure To ensure better market penetration of EVs and, to address consumer concerns like range
anxiety, the availability and accessibility of appropriate charging infrastructure is an important
precondition for EV market uptake and can influence consumers’ decisions to purchase an EV
over an ICE.
With approximately 430 EVs, Barbados is a forerunner in EV penetration in the CARICOM region,
which goes hand in hand with an extensive charging network of about 400 private EV chargers
and 45 public chargers compared to approximately 40 gas stations on island4. Gas stations,
however, can accommodate more cars to refuel and fuelling times are shorter compared to
charging times. Other islands reporting EVs in operation include Antigua & Barbuda, the
Bahamas, Belize, Dominica, Grenada, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, and
Trinidad & Tobago, although in much lower numbers.
When planning for and setting up a network of charging stations, the most suitable locations and
their accessibility must be considered while anticipating future mobility changes. A multi-
stakeholder approach should be applied to capture all relevant actors ranging from energy,
mobility and infrastructure enterprises, to policymakers, regulators and urban planners; possibly
transforming their roles and the appearance of the changing market.
Infrastructure planning needs to be closely linked with electric network planning in order to
assess the preparedness of the existing electricity grid for the additional load, the integration of
renewable energy sources and electricity storage options at the point of installation associated
with electric mobility charging.
Further, policy, legislation and regulation need to be appropriate to govern the setting-up and
operation of a charging infrastructure, standards to facilitate the inter-operability of various
types of charging infrastructure, the tariffs charged to consumers, as well as the collection,
management and protection of data that is produced every time a vehicle is charged.
Attractive Market Conditions World leaders in electric mobility use a variety of policy measures to support the uptake of EVs;
typically starting from the establishment of e-mobility targets, followed by the adoption of
vehicle and charging standards and an EV deployment plan. Support measures range from fuel
economy standards and incentives for zero and low-emission vehicles, to fiscal and economic
instruments bridging the cost gap between electric and conventional vehicles; and policies to
facilitate the deployment of charging infrastructure. Existing good practice examples would
require adaptation to the Caribbean context and market specificities. Policies and market
4 Megapower, Caribbean Renewable Energy Forum 2019
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frameworks must ensure that e-mobility can play an active role in enhancing the flexibility of
power systems.
Progressive rate structures like time-of-use tariffs could encourage drivers to charge vehicles
during daytime hours, utilising renewable energy generation resources with energy storage, and
with the introduction of enhanced grid management. Strategically located solar charging stations
can help to ensure that EVs draw primarily from renewable sources rather than conventional
power plants.ii
Government Tax Revenue and E-mobility Losses or reduction in the tax revenue derived from vehicle and fuel taxes are a major concern
for governments when transitioning to an electrified transportation sector. The balance,
however, is often only considered between foreign exchange spending on fossil fuel imports and
government revenues from vehicle related duties and taxes - without factoring in the substantial
health and environmental costs of conventional vehicles to society. Gradually increasing taxes on
carbon-intensive fuels, combined with distance-based charges5 are among possible measures to
support the long-term transition to zero-emission mobility and congestion reduction, while
maintaining revenue from transportation related taxes6. The fiscal impact of a higher EV
penetration requires more in-depth analysis to develop appropriate solutions for the Caribbean
context that maintain government revenues from the transport sector to recover infrastructure
costs, reflect the costs of pollution and congestions, while taking social implications into account.
Adaptation of Services The e-mobility transition will also require new and adapted services along the whole vehicle value
chain. Car dealerships need to adapt warranty conditions to appropriately capture electrical and
non-electrical parts of a vehicle. After-sales services will therefore need to consider the following:
1) accommodate for battery exchange and breakdown services; 2) establish different
maintenance and repair requirements, and schedules for the electric powertrain; 3) maintenance
of charging devices; 4) monitoring of battery capacity and usage; 5) monitor and report on EV
systems diagnostics.
5 A distance-based charging system would charge per kilometre driven, instead of providing unlimited access to the road network (via a vignette or other verification system); distance-based charging is introduced to charge for costs imposed by vehicles, including road use, insurance, pollution emissions, and other environmental impacts. 6 IEA Global EV Outlook 2019
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Mechanics and first responders should also be trained in the specifics of EVs, and service stations
and vehicle maintenance workshops may have to be retrofitted to repair or service EVs.
Insurance companies in many cases lack the necessary knowledge about electric vehicles, or are
hesitant to offer appropriate insurance products, which requires active efforts in awareness
raising, information provision and training.
Ensuring Market Uptake Apart from economic incentives and other policy measures that increase the value proposition
of EVs (such as lower toll or parking fees, waivers to access restrictions, use of priority lanes etc.),
consumer and industry awareness about the benefits, challenges and opportunities of electric
vehicles have to be improved to enable a stronger uptake of EVs.
Prevailing market structures can cause information deficits and market transparency issues that
make it difficult for consumers to make informed purchase decisions. Consumers may not be
informed enough to consider the total cost of ownership instead of higher upfront investment
costs of EVs or mitigate concerns and preconceptions like range anxiety7.
Besides targeted information campaigns, the deployment of an extensive charging network and
technological innovations like accurate navigation and range prediction systems, the continued
7 Range anxiety refers to the fear that a vehicle has insufficient range to reach its destination and would thus strand its occupants; it is considered one of the most significant barriers for large-scale adoption of electric vehicles.
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development of higher battery capacity at cost-effective prices or the introduction of battery
swapping services will gradually alleviate range anxiety.
Among the known factors which dissuade Caribbean consumers from choosing EVs over ICE
vehicles, are range anxiety and high upfront costs. However, consumers are very seldomly privy
to all the necessary information to equip them to make informed decisions about purchasing EVs.
Several global studies8 suggest a lower total cost of ownership9 (TCO) for EVs compared to
conventional models in different markets, which also includes cost considerations for the
investment in a replacement battery before its expected end of life.
Nonetheless, this information is not readily available to potential EV buyers and is thus not
considered in the purchase decision. Without these important considerations, purchasing and
owning an EV is often perceived as a ‘rich man’s hobby’. Targeted consumer information
campaigns and efforts from the automotive industry and local markets, are essential to influence
the availability of competitively accessible and aesthetically desirable EVs. Increased availability
of affordable and attractively designed EVs maybe helpful in encouraging a higher penetration
into the EV market, for consumers who are motivated not by environmental awareness but
rather by the comfort of owning a personal vehicle.
8 e.g. Palmer, K., Tateb, J. E., Wadudc, Z. et al. (2018). Total cost of ownership and market share for hybrid and electric vehicles in the UK, US and Japan. Applied Energy, 209: 108-119; 9 TCO including motor vehicle depreciation, registration, fuel, insurance, maintenance and financing costs (with interest)
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At the beginning of Industry 4.010 and the emergence of the ‘Internet of Things’, vehicles,
infrastructure and users are becoming increasingly digitalised and connected. Enhanced
connectivity and digitalisation enable interactions within vehicles, between vehicles and
infrastructure as well as across transportation networks, allowing users to manage their smart
vehicles, homes and appliances remotely, and enabling EVs to provide flexibility services to the
power system.
Vehicle to Grid (V2G) technology allows EVs to serve as distributed storage assets and flexible
capacity, which facilitate the integration of higher shares of renewable energy into the grid by
managing and stabilizing power output during periods of power output intermittency created by
variable renewable energy sources like solar or wind power. When aggregated and connected to
the grid, EVs can collectively mimic a fast-responding backup generator11. These ancillary services
could help utilities (or grid operators) maintain grid stability by optimising charging for demand
response, and better manage the integration of EV charging loads and distributed generation
onto the grid, while generating revenue for vehicle owners. Nonetheless, the provision of these
services might negatively affect vehicle battery performance and lifespan, which requires further
assessment. Utility business models and planning processes will have to be adapted to
appropriately capture the ancillary services provided by EVs, to account for and manage
additional loads; and to appropriately mine and utilize data for measurement and verification.
Enhanced interconnectivity and digitalisation create a wealth of data. This requires secure data
collection, processing and management. Ensuring data protection and cyber security is very
important for EV industry development; however, in order to appropriately capturing the value
of this data, legal and regulatory frameworks will have to govern the following: 1) who has access
to the data and when 2) who can process which data and develop intelligence based on big
datasets; and 3) who will benefit from the respective datasets and intelligence products.
10 Industry 4.0 or the “Fourth Industrial Revolution” refers to an era where technological advancements are revolutionizing industrial production, where automation of manufacturing processes is upgraded with smart autonomous systems that are capable of self-cognition, self-optimization and self-customisation. Industry 4.0 is expected to affect all sectors and disciplines, with particularly strong impact on developing countries, where substantial changes in education systems are required to award the necessary skills in literacy, numeracy and digitalisation (UNIDO, Industry 4.0, the opportunities behind the challenge, 2018). 11 World Economic Forum, Electric Vehicles for Smarter Cities: The Future of Energy and Mobility, 2018 (WEF, 2018)
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The switch from conventional to electric vehicles will not singlehandedly achieve the desired
mobility revolution and reap the full benefits of EVs. Transport demand management aims to
reduce and redistribute transport demand in space and time, through the application of policies
and strategies. Some related interventions include improving urban planning, enhancing the
public transportation system, expanding the pedestrian and bicycle infrastructure and
introducing parking management. These measures hold the potential to substantially mitigate
existing mobility challenges in the Caribbean, including high rates of congestion, traffic accidents
and pollution, and should be considered in parallel to the deployment of EVs. Intelligent
transportation systems can provide innovative services for different modes of transport and
traffic management that will enable users to be better informed, and make the transportation
system smarter, safer and more coordinated across the networks. Technology examples include
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automatic road (speed) enforcement, dynamic traffic light sequencing, collision avoidance
systems or emergency vehicle notification systems.
Car manufacturers and tech companies are exploring disrupting current transportation systems
and modes from a different angle: Replacing ICEs, human control and private car ownership with
shared, electric and autonomous vehicles. Autonomously driven vehicles hold the promise of
higher fuel efficiency by optimising the drive cycle12, improving traffic flow and reducing road
accidents and fatalities. They could also provide better access to mobility for elderly or disabled
people. However, while their convenience could alleviate critical transportation problems for
some, it might simultaneously contribute to an increase in car travels.
Autonomous driving, whether considered the future prediction of big data enthusiasts, or the
optimistic aspirations of the automotive industry, is presently experiencing pivotal advances at
scale in many parts of the world, with the evolution of adaptive cruise control and assisted
driving, among other technologies.
Policy, legal and regulatory frameworks will eventually have to address when and where
autonomous vehicles can be integrated into urban road networks through transport planning
and management. Also, consideration should be given to how they will co-exist with pedestrians,
cyclists and other road users, whether their operation requires special licenses or permits; and
how they are interconnected with smart city networks. Besides the technical challenges of
improving the perception system13 and decision-making capabilities to allow for a widespread
use of these vehicles, the legal framework has to govern liability in case of accidents, but also
data management and security issues related to vehicle communication systems. Similarly, as
with electric vehicles, adaptations in the delivery of services will be required, ranging from
warranties, to maintenance and insurance regimes.
The Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) is an institution of
CARICOM, established in the framework of the Global Network of Regional Sustainable Energy
Centres (i.e. the GN-SEC) and its sub-network for small island developing states (SIDS) in Africa,
the Caribbean, the Indian Ocean and the Pacific. The CCREEE is the implementation hub for
12 A driving cycle is a series of data points representing the speed of a vehicle versus time. Driving cycles are
produced by different countries and organizations to assess the performance of vehicles in various ways, as for
example fuel consumption and polluting emissions.
13 Perception systems using cameras, radar, lidar, electronic maps etc. to identify objects and understand how to circumvent them or how to react to a certain situation;
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sustainable energy activities and projects within the CARICOM region, having been
operationalised with the signing and ratification of the CCREEE legal agreement in May 2018.
The CCREEE has a clear vision, mission and mandate which are fully aligned with the CARICOM’s
vision, mission and core values:
“A Caribbean Community that is integrated, inclusive and resilient; driven by knowledge,
excellence, innovation and productivity; a Community where every citizen is secure and
has the opportunity to realise his or her potential with guaranteed human rights and
social justice; and contributes to, and shares in, its economic, social and cultural
prosperity; a Community which is a unified and competitive force in the global arena”.
The CCREEE aims at improving access to modern, affordable and reliable energy services, energy
security and mitigation of negative externalities of the energy system (e.g. local pollution and
GHG emissions) by promoting renewable energy and energy efficiency investments, markets and
industries in the Caribbean. Sustainable Transportation is one of the core Strategic Programmes
of the CCREEE Strategic Plan 2019-2023. The programme will contribute to the implementation
of the Regional Electric Vehicle Strategy and aims at improving the efficiency of transport while
reducing CO2 emissions and adverse environmental impacts of transportation.
i 2017 Energy Report Card CARICOM https://energy.caricom.org/reports-2/ ii https://blogs.iadb.org/energia/en/mobilizing-the-future-of-transportation-in-the-caribbean/